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The real turning point for Turkey's sugar industry came in 2000. The most ambitious agricultural reforms in Turkish history completely transformed the environment for the Kayseri sugar company, and for Turkish agriculture as a whole. With one swoop, the close link between the state and most agro-processors, the supervision of agricultural cooperatives by the state and, most importantly, the decade-long policy of setting prices for sugar beet and sugar, came to an end. Turkseker was moved to the privatisation administration in preparation for sale. This was a momentous step: with its 25 sugar refineries, Turkseker was still the eighth largest Turkish company in terms of turnover. Subsidies to Turkseker were also sharply reduced. The immediate effect was a fall in Turkish sugar beet production of nearly half between 1998 and 2001.
In 2001, a new Sugar Law was passed which ended decades of price controls over sugar beet and refined sugar. Domestic prices are now determined by the market, although external tariffs remain high, as in the EU. To prevent overproduction, annual production quotas are now allocated to all companies by a new, independent Sugar Board.
The impact of the 2000 agricultural reforms varied dramatically between state and private companies. The number of beet farmers supplying the 25 Turkseker refineries fell from 413,000 in 1998 to 303,000 in 2004. The Kayseri factory, by contrast, doubled its daily processing capacity to 10,000 tonnes, and concluded contracts with an additional 3,000 farmers. Today, it is the second most profitable sugar refinery in Turkey, producing 1.6 million tonnes of refined sugar in 2003. Company managers are anticipating further growth, as the Kayseri sugar factory is allocated more quota at the expense of failing refineries in the east.
http://www.esiweb.org/index.php?lang=en&id=156&document_ID=69
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